Brazil today has a larger population and gross national product than Yeltsin’s Russia. Yet, against all reason, it continues to occupy a curiously marginal position in the contemporary historical consciousness. In 15 years it has left virtually no trace in these pages. Popular images, despite increasing tourism, remain scanty: folk-villains on the run, seasonal parades in fancy-dress, periodic football triumphs. In cultural influence, while the music and literature of Latin America have swept round the world, Brazil has receded. The rhythms of salsa have long eclipsed those of the samba, and the list of headline novelists conspicuously omits any name from the land of Machado de Assis, the most ingenious 19th-century practitioner of the form outside Europe. Today Northern readers are more likely to get an impression of Brazil from Peruvian bombast than from any native fiction.
If the largest society in the Southern hemisphere remains mentally off-screen, part of the reason lies in its recent political history. Since the Sixties, there have been four major dramas in Latin America that have caught the attention of the world. Three of these were either by-passed or aborted, and the other took a peculiar form, in Brazil. Internationally, the continent became news for the first time in the wake of the Cuban Revolution, when the spectre of guerrilla movements haunted Washington. Brazil was never in the forefront of this turbulence. Compared with Venezuela or Colombia, Peru or Argentina, its episodes of insurgency – largely urban – were brief and soon extinguished. Military dictatorship, on the other hand, arrived earlier – already in 1964, nearly a decade before Pinochet or Videla – and lasted longer, for over twenty years. The Brazilian generals were always the most adroit of the region, presiding over record rates of growth in the Seventies, and opening a carefully calibrated re-democratisation in the Eighties, in a process whose outcome they controlled nearly to the end.
In 1984 huge demonstrations for direct elections broke out in the big cities, as a domesticated Congress prepared to pick a new President under guidelines from the High Command. The regime did not yield. But fear of popular retribution split the civilian élites that had hitherto supported it, as many of the landed notables of the North-East – the core of its system of political alliances – defected to the opposition. The military held off the pressure from the streets, but at the cost of losing control of Congress, where a ‘liberal front’ of retrograde landowners and local bosses, hitherto pliable henchmen of the regime, switched from the official candidate to a moderate politician, Tancredo Neves, running as a symbol of constitutional principle and reconciliation.
Although Neves had never been an especially outspoken opponent of the dictatorship, and would not have won a competition under direct elections, his indirect adoption by Congress as the new President was nevertheless consecrated by public opinion, amid enormous expectation, as the final victory of democracy over praetorian tyranny. His sudden death, on the eve of his inauguration, punctured all euphoria. A leading ornament of the dictatorship, José Sarney, a belletrist oligarch from the latifundia of Maranhão, whom Neves had chosen as his running-mate, took his place. The ideological anti-climax was acute. Brazil shuffled into the era of democratisation, common to Latin America, bewildered and dispirited. There was no sharp discontinuity of institutions or persons, comparable to the fall of the Junta in Argentina or the rejection of autocracy in Chile.
Trying to make good his lack of popular legitimacy, Sarney formed a government that was actually somewhat less conservative than the administration envisaged by Neves – a characteristic Brazilian move. But his Presidency remained weak and erratic. When he came in, annual inflation was running at over 200 per cent; when he went out, a series of misfired shock treatments and emergency plans left it rising towards 2000 per cent. The late Eighties were a time of economic recession and growing social tension. In 1988 a new Constitution was adopted, with more democratic safeguards than hitherto, but otherwise unwieldy and incoherent. When the first direct elections for President were held under it in 1989, the result was a tight contest between the Left, represented by Lula – Luis Inacio da Silva, former auto-worker and trade-union leader – and the Right, in the shape of a playboy demagogue from one of the oldest and richest political families in the country, Fernando Collor e Melo. Thanks to stentorian backing from the Globo television empire, commanding 70 per cent of all viewers, and his own charismatic appeal to the unorganised poor, Collor won by a narrow margin. His inaugural address – drafted by José Guilherme Merquior, the most talented liberal intellectual of his generation, well-known as a diplomat here in London – promised a sweeping demolition of state controls, and release of the spirit of freedom and individual enterprise, with due concern for the least advantaged. The hour of Latin American neo-liberalism, chiming with the arrival of Salinas in Mexico, Menem in Argentina and Fujimori in Peru, seemed now to have arrived in Brazil.
Once more, however, the experience typical of the continent short-circuited in Brazil. Collor did start to reduce tariffs, privatise public companies and cut bureaucratic payrolls. But his bid to beat down inflation by freezing bank deposits proved even more chaotic than Sarney’s efforts, antagonising the well-off without achieving any stabilisation. Then a family quarrel in his fief of Alagoas suddenly revealed a trail of monumental malfeasance, even by tolerant local standards: slush-funds of $200 million, extorted for political clientage and personal ostentation. Since Collor had based his electoral campaign on promises to root out corruption, such brazen looting stunned even close followers. As the charges mounted, Collor went on television and called the people to demonstrate their patriotic support for the President, in his battle against an élite conspiracy, by sporting the green and yellow colours of the nation. The next day the cities were decked in black. Within a fortnight he was out of office. Democratisation had issued into ambiguity and confusion: liberalisation ended in farce. By 1992, when Collor was ejected, the country appeared to have missed the trend of the time again. While Argentina, Uruguay, Chile, Peru, Mexico, were posting much-touted economic recoveries under neo-liberal discipline, Brazil was still floundering in an inflationary morass, apparently rudderless.
Two years later, the scene suddenly looks different. In and through the inflationary spiral of the past decade, and the deep recessions of 1981-3 and 1988-90, the Brazilian economy continued to diversify. Unobtrusively, capital stock was modernised, productivity rose, and exports increased, from about $3-4 billion a year in 1981 to some $25 billion this year, yielding a positive trade balance and substantial reserves. By the mid-Nineties, the objective weight of the country in the new global order had altered. Richer and more orderly than a derelict Russia, Brazil is within sight of achieving the rank of a major power, to which it never – despite much over-blown rhetoric – came near in the past; and for the first time in its history, the country has acquired a ruler capable of putting it unmistakeably on the international map. Fernando Henrique Cardoso, when he becomes President next year, will arguably be the most intellectually sophisticated head of any contemporary state.
In Latin America, from the time of Sarmiento or Nabuco onwards, writers and scholars have traditionally played a major role on the political stage. Vargas Llosa’s ambition to govern Peru is a recent episode. Rómulo Gallegos, another novelist, was Venezuela’s first elected President after the war. The current Foreign Minister of Argentina, Guido di Tella, a distinguished economic historian, is a long-time fellow of St Antony’s. Cardoso, co-author of the most influential single work of South American social science in the Sixties – Dependency and Development in Latin America, written with Enzo Falletto – in one sense fits a regional pattern. His rise to power even has a wryly appropriate national touch. Brazil was the only country in the world where the inventor of sociology as a discipline, Auguste Comte, inspired the founders of the Republic, firing young officers to overthrow the Empire in 1889 and bequeathing the motto – Ordem e Progresso – that still unfurls across the national flag. A century later, on the same soil, Comte’s dream of the sociologist-ruler seems to have come true.
There is, however, more than one irony in its fulfilment. For the kind of sociology that made Cardoso’s name was the antithesis of positivism. His work represented a Marxism whose point of honour was a dialectical understanding of society. In the Latin America of the Sixties and Seventies, that might seem commonplace. In fact, however, it emerged from an exceptional milieu, which is the key to Cardoso’s early career. He was the son of a nationalist general at a time when the Brazilian officer corps was sharply divided between anti-Communist and left-nationalist factions. In the early Fifties he studied at the University of São Paulo, where he soon got a teaching post. At that time – this is not something the Brazilian press, protective of the Presidential candidate, cared to mention till after the elections – he was a Communist. The PCB was then the only significant organisation of the Brazilian Left, so there was little unusual about the choice. He left the Party around 1954, but for another ten years remained informally close to it – part of the linha auxiliar, as such sympathisers were called. More formative than this affiliation, however, was the institution at which he worked.
The University of São Paulo was founded in 1934 by a group of liberal oligarchs, led by the scion of the city’s newspaper dynasty, Julio de Mesquita Filho. At the time German and Italian cultural influence was strong in Brazil – reflecting not only the importance of the two immigrant communities, but also the growing prestige of European Fascism, which was to inspire the creation of the authoritarian Estado Novo by Getulio Vargas three years later. The paulista liberals, resolved to create an institution with high intellectual standards, wanted European lecturers for it. For mathematics, natural sciences and classics they were willing to engage Italians and Germans. But for the social sciences and philosophy, where political issues were at stake, they contracted with the French state, whose teachers – they felt – could be relied on to uphold democratic values. The arrangement bore historic fruit in the series of great French names who, before they were known in the world at large, came to the Faculty in São Paulo: Lévi-Strauss, Braudel, Pierre Monbeig, Roger Bastide, Claude Lefort, Michel Foucault. The deepest local imprint was left in philosophy, where a set of outstanding instructors trained a generation of thinkers, vividly memorialised in a recent work by Paulo Eduardo Arantes as Um Departamento Francês de Ultramar. By the late Fifties this was – not unexpectedly – an intellectual milieu increasingly interested in Marx. In 1958 a group of young intellectuals from different disciplines – it included Cardoso from sociology, Paul Singer from economics, José Artur Giannotti from philosophy, Roberto Schwarz from literature – started a seminar on Capital that became a legend, lasting five years and affecting the atmosphere of the Faculty for ten.
When the Armed Forces seized power in 1964, the immediate targets of proscription were mainly politicians, or those close to them. With a military search out for him, Cardoso chose flight to Chile. In the university, most of his colleagues continued to work relatively unmolested. In these years, when the dictatorship had radicalised intellectual opposition without yet repressing it, the Faculty on Rua Maria Antonia was an unforgettable place. An inconspicuous, squat building near the centre of the city, with a dingy façade and lugubrious interior, surrounded by a tangle of bars and lanchonetes into which its life continuously spilt out, it was like some magical cave of – mostly political – ideas and passions. The French connection was still active: certainly, for anyone coming from London, the scene had elements of a tropical version of the sixième. But it was also in many ways livelier. Intellectually, the Faculty seminar on Capital predated the famous one at the Ecole Normale. Here in São Paulo – it came as a shock to discover in 1966 – there already existed in Giannotti’s Origens da Dialéctica do Trabalho, a study of the Feuerbachian matrix of the young Marx, much more scholarly than any published by the Althusserian school. The Marxism of the Maria Antonia was also more cosmopolitan than that of the rue d’Ulm: the Frankfurt School, still a blank page in Paris, was a significant presence, as were Austro-Marxist traditions. All this mingled with the incomparable Brazilian sociability; the flow of equatorial batidas over the tiny counters; the enigma of women more independent than in Europe, emancipated by maids; an electric sense of upheavals to come – for the visiting student, a heady brew.
By 1968 political opposition to the dictatorship was mounting: parliamentary manoeuvres, industrial strikes, university rebellions, even scattered armed actions. In October a pitched battle broke out between students of Mackenzie College, the conservative private university on the other side of the Maria Antonia, opposite the Faculty building, and militants in the USP. Bombarded by the superior forces of the Right, the Faculty was burnt out, and one of its defenders killed – whereupon the Army sent in the cavalry and closed the site permanently, bringing an era to a close. A few weeks later, the Fifth Institutional Act clinched the regime’s power for the next decade. Cardoso, who had returned to Brazil a few months earlier, was forcibly ejected from the chair to which he had just been elected at the Faculty. But he had used his years abroad to good advantage, and with funding from the Ford Foundation helped set up Cebrap, a research centre in São Paulo that carried on much of the spirit of the Maria Antonia in collective investigations of Brazilian society under the dictatorship. In this period, the dominant influence in his thought continued to be Marxist. In the early Seventies, while pursuing empirical work, Cardoso was doing battle with Poulantzas over the definition of social classes, clarifying uses or misuses of the category of dependency, of a reserve army of labour, of marginality. A decade later, he was asking whether Gramsci’s concept of hegemony could still be valid when ‘liberal-democratic parliamentarism is disappearing as a principle of legitimacy in advanced societies themselves’: new forms of ‘state-bourgeois’ domination required the invention of new forms of ‘control of production’, respectful of initiatives and liberties, in the articulation of a ‘socialist utopia’.
In the mid-Seventies the military regime, confident that the country was now secure from subversion, started its slow institutional opening. As soon as it did so, the opposition party which it had itself created – the MDB, designed as official alter to the government ego – rapidly gained ground, as a united front against the dictatorship. In 1978 Cardoso ran for senator on a sub-section of its ticket in São Paulo. He was uncomfortable on the hustings, and easily defeated. But he came in second, and so under a recent military law remained suplente – ‘next in line’ – behind the successful candidate. Four years later, when the senator was in turn elected governor, the substitute slipped into his vacant seat. It was a privileged entry into the world of high politics. He still had much to learn. In 1985, while still a senator, he ran for mayor of São Paulo. Posing over-confidently for photographers in City Hall on the eve of the polls, he provoked a reaction and lost. The next year, however, there were new congressional elections. By now the omnibus party of which he had become a fixture, the PMDB, was no longer in opposition: it was the official base of President Sarney, whose issue of a new currency, the cruzado – apparently quelling inflation a few months before the election – gave it a landslide throughout the country, carrying Cardoso with a large margin back into the Senate.
Once the elections were over, the Cruzado Plan collapsed. Sarney lost all credit, and the PMDB – never more than a loose patchwork – came apart at the seams. In 1988 Cardoso, now president of the Senate, and a group of colleagues seceded from it to found the Brazilian Social-Democratic Party (PSDB). In his case, the move crystallised a political evolution. Within the PMDB, a catch-all front stretching from undeclared Communists to scarcely repentant collaborationists, ideological positions typically remained veiled or indeterminate. Over time, however, Cardoso came to favour with increasing clarity a political strategy close to that of Eurosocialism. The aim of the PSDB was to become a Brazilian version of the parties of González or Mitterrand. Initially, the project of a modernist social democracy looked fragile. In the first round of the Presidential election of 1989, the Party’s candidate was easily outpolled by two rivals to its left, the radical trade-unionist Lula, running for the Workers’ Party (PT), and also the veteran populist Brizola. On the second ballot, after some hesitation, it backed Lula against Collor. But many of its voters – especially in São Paulo, where the electoral balance was critical – opted for Collor, helping him to victory.
The new President, catapulted into office thanks to television, lacked any organised base in Congress. To start with, he tried to govern the country with a motley group of personal appointees, often amateurs without party background. But when these utterly failed to bring inflation under control, Collor changed tack and tried to draw politicians of some weight into his government. The PSDB was among the parties to which he made overtures. Invited to take office under Collor, its leadership divided. Cardoso was among those who favoured joining his cabinet. A month later, the scandal of Presidential corruption – already bubbling – boiled over. Once Congress had formally set up an enquiry, Collor became a political untouchable. This was a narrow escape for Cardoso. Had the investigation not started so quickly, he would have paid a stiff price for his willingness to work with Collor. In the subsequent Congressional investigation, the PSDB did not play a leading part: success in exposing the President fell principally to the PT.
By a strange twist, however, Collor’s impeachment gave Cardoso his breakthrough. Collor had picked for his running mate a small-town politician from the backlands of Minas, with whom he had nothing in common. This individual, Itamar Franco, was now suddenly put, blinking with bewilderment, into the Presidential Palace. A pale, shapeless figure, he had never aspired to supreme office and had few ideas what to do with it, although his instincts were humane and he was honest. Timid and provincial, he desperately needed counsel and reassurance. The PSDB came forward to help him, and he made Cardoso foreign minister. Soon he was captivated. Fernando Henrique – from this point we may drop the surname, as Brazilians now do – was everything Itamar was not. Strikingly good-looking, he combines a natural authority with an urbane, faintly saturnine charm. Within a few months, this cosmopolitan prince enjoyed an ascendancy over an awkward, nervous ruler which was in some ways closer to the position of Buckingham or Godoy than that of a member of a modern cabinet. In the spring of 1993 Itamar gave him the most powerful job in the government, the minister of economy.
Inflation was still raging at a rate exceeded only by Serbia and Zaire. At the Ministry, Fernando Henrique assembled a group of gifted economists, long-time friends, who prepared yet another stabilisation plan. This time it was a technically competent scheme which did not rely on price controls that no Brazilian government has the power to enforce, achieved real cuts in public spending, and was phased in gradually rather than decreed overnight. Crucially, there were now, for the first time, substantial foreign reserves, capable of backing a hard currency. The initial measures, involving labyrinthine bargaining in Congress, were not dramatic. While they were being negotiated, the public mood was swinging rapidly against the Government. Outside the hothouse of Brasilia, popular disaffection with the political establishment was running high. The destruction of Collor and the interim of Itamar had left a political vacuum, in which only one oppositional force looked credible. This was the party headed by Lula.
The origins of the PT lay in the metalworkers’ strikes that had erupted in the industrial belt round São Paulo in the late Seventies. There Lula rose to fame as a trade-union leader in the year Fernando Henrique (ten years older) first ran for Congress. The two were then allies. Out of the new working-class militancy, however, emerged a grass-roots determination to create a political party that would not be a new edition of traditional left populism, and could not be absorbed into the capacious folds of the PMDB. The aim of the PT, founded in 1980, was to develop an independent politics of labour in Brazil. Since its primary impulse came from a rebellious trade-union movement, and much of its social inspiration from base communities in the Catholic Church, it was often compared to Solidarity – an analogy of which it was proud; although there was always a third component in the Party, absent in Poland, supplied by a Marxist Left that had broken with Stalinism. Initially, the performance of the PT at the polls was quite modest: by 1986 it still attracted only 7 per cent of the electorate. Three years later, however, the size of the asset it possessed in its leader became apparent. Lula, who comes from a peasant family in the North-East that migrated to São Paulo (where he got a job in a nuts-and-bolts factory at the age of 13), is an authentic working-class hero – unschooled and unpretentious, a courageous organiser and a passionate speaker: a man with whom millions of the excluded could identify. In 1989, his second place in the first round of the Presidential elections was an impressive advance, but still only represented 16 per cent of the poll. It was the second ballot against Collor, when he pulled in 43 per cent of the valid votes, that established Lula as a national politician with an appeal capable of extending well beyond his own party.
Two years later the downfall of Collor, in which the PT played a prominent role, inevitably spot-lit the opponent who had nearly defeated him. By May of this year, with Presidential elections set for October, Lula had built up what appeared to many an unassailable lead in the opinion polls – over 40 per cent. Fernando Henrique, who had just stepped down as minister to run against him, was the preference of no more than some 16 per cent of the voters. Five months later, the outcome was the reverse. In October Fernando Henrique trounced Lula by a huge margin – 44 to 22 per cent. What caused this stunning turnaround? First, and most fundamentally, the success of the new currency – the real – which replaced the discredited cruzado in June. The impact of the change was instantaneous, just as that of the cruzado itself had once been. Within the space of eight weeks, inflation fell from 50 to 2 per cent a month. In the rich countries we are accustomed to the fine-tuning of economic policies to the electoral cycle – the loosening of credit or the lowering of taxes for political advantage in the run-up to polls. But the margin of advantage such adjustments yield incumbents bears no comparison with the rewards of suddenly stabilising money in a developing country gripped by super-inflation.
On the eve of the reform, no economy in the world was so permeated by indexation as Brazil’s. First introduced by the dictatorship in the Sixties to encourage long-term holding of government bonds, the principle of proofing assets and incomes against inflation, by ever more complicated systems of adjustment, spread remorselessly as inflation took off in the late Seventies. Eventually, any ordinary bank account was in theory insulated against the monthly spiral of price increases by these devices. This was one of the reasons inflation in Brazil was so durable and also relatively tolerable. Protection, however, extended only to those with significant savings – the upper and middle classes who make up less than a third of the population. For the poor, dependent on precarious sources of cash, money lost its value at terrifying speed: wages had to be spent immediately if they were not to lose half their value by the end of the month. Here the acceleration of the monetary whirligig was nightmarish. Any politician able to halt it, even temporarily, commands – because the immediate relief is so tangible, in every transaction of daily life – the political equivalent of a grand slam.
The issue of the real was, of course, hailed by Brazilian business and banking as a restoration of sound money and financial orthodoxy, and welcomed by the middle classes as a simplification of daily life. But it was the least well-off, the great majority of ordinary people, whom the new currency affected most immediately. Its timing, carefully premeditated, was perfect. Had it been launched earlier, there was a danger of its unravelling under the pressures that had overwhelmed previous attempts to disinflate the Brazilian economy. Had it been delayed till later, as rigorists in the technical group which prepared the Plano Real wanted, it would have deprived the Minister of the coup de main that transformed his candidacy. The PT, whose electoral platform had scarcely mentioned the problem of inflation, was caught off-guard and lacked any credible alternative.
The real was in itself probably enough to assure Fernando Henrique of victory: within a month of its introduction, he was well ahead of Lula. But he himself had not quite believed that it would have such a miraculous effect, and had taken out an insurance policy: before the new currency came into force, he concluded an alliance with the leading political cartel of the North-Eastern oligarchy, the Liberal Front, which at the last minute had abandoned the dictatorship its members had adorned for twenty years. The region over which this class presides is another planet from the industrial South-Centre of the country – one of misery, hunger and disease, social despair and early death. Here traditional landowners, controlling vast, ill-run estates, form the core of the ruling stratum. But under the military regime and its postlude, when Sarney held the Presidency, lavish patronage from Brasilia financed the commercial modernisation of state capitals in the North-East, spawning new outworks for the local dynasties – the Collor empire in Alagoas was a case in point – and a technically sleeker generation of notables.
The means of political power in this zone have increasingly shifted from the bailiff towards broadcasting – no self-respecting clan is now without its radio or TV station. But the substance remains much the same. In the late Sixties, this was a Namieresque landscape of families like the Rosado connection in Rio Grande do Norte, so numerous that its patriarch ran out of names for his last-born, simply enumerating them – a touch of elegance – in French: there were two Congressmen called, respectively, Dix-Huit and Vingt Rosado. Today, nearly half the entire Congressional delegation of the (large) state of Pará are relatives of the former governor (now incumbent senator). The politician from the Liberal Front chosen by Cardoso to be his running mate, Marco Maciel, factotum of the military in the Seventies, is the fifth of his line to have governed Pernambuco since the 1820s.
Why did Fernando Henrique make this alliance, thereby shocking many admirers? The electoral clientele of the Liberal Front (PFL) was one reason. Its network of local bosses could deliver a secure package of votes, which few other potential partners could match. But there was also a wider calculation. A deal with the PFL sent a signal to all sectors of the Brazilian establishment that Fernando Henrique could be trusted as a barrier against Lula. Some of these were much more powerful than any regional clan in the North-East. Above all, in Rio there was the Globo empire of the newspaper magnate Roberto Marinho, an ardent champion of the dictatorship, who had gained an impregnable dominance of television under it. In those days the Minister responsible for awarding the crucial licences was Antonio Carlos Magalhães, of the Bahía oligarchy, later the most important architect of the PFL. No one was better placed to broker the adoption of Fernando Henrique by the Globo machine. Once Marinho, who had played such a large part in electing Collor, was on his side, the full force of a television chain whose scruples resemble those of Murdoch and sway exceeds that of Berlusconi, swung into action. The more decorous organs of business and establishment opinion, from the conservative Estado de São Paulo of the Mesquita family downwards, followed suit. Rarely has the Right in Brazil closed ranks so visibly, nor has there been such a lop-sided barrage of media support, behind a candidate.
Asked about these allies at a press conference, Fernando Henrique philosophically remarked: ‘People change. Politics is about transformation. Nobody can govern a country the size of Brazil without alliances. If we’re talking about those who supported the military regime, there weren’t two hundred individuals who had the courage to struggle against the dictatorship. You can’t make a government with two hundred persons.’ Understood literally, of course, there were thousands who resisted the dictatorship. The tacit reference can only be to the natural rulers of the country. The Italian term ‘transformism’ refers to the political process – inveterate in its country of origin – whereby radical pressures are gradually absorbed and inverted by conservative forces, until they serve the opposite of their original ends. But if in Italy trasformismo has generally connoted an organic, molecular alteration – of a kind which leaves all that is essential unaltered – analogous shifts in Latin America are altogether more precipitous and volatile. This is the continent par excellence of sudden political reconciliations and ideological volte-faces. In neighbouring Bolivia, the MIR – ‘Movement of the Revolutonary Left’ a few years ago joined forces with General Banzer, former dictator of the Right, in a coalition to thwart a discredited Centre. Fernando Henrique’s deal with the PFL is in this pragmatic tradition. But in Brazil such switches of alliance, often no less startling than elsewhere, are typically less brittle. The dark side of Brazilian conviviality is the ease with which instrumental calculation becomes sentimental affinity, binding opposites together in subtler and more durable forms of union. Which side tends to transform which, in such amalgams, is not difficult to guess. Historically, Brazilian conservatism has been uniquely ductile in its capacity to embrace and disarm risks to the status quo.
For the moment, the pact with the Right has paid off. By August it was obvious that Fernando Henrique was unbeatable. The campaign itself was a one-sided affair. A month before polling, the Finance Minister put in to manage the Plano Real – Presidential candidates have to resign office once they have declared – was caught by parabolic antennae telling a television interviewer, off the record, that he was manipulating price statistics to help Cardoso’s claim to have defeated inflation. ‘I have no scruples,’ he confided, ‘what is good news we exploit; what is bad we hide.’ He continued: ‘As Fernando Henrique knows, I am his great elector. This is terrific for the Globo network. Instead of having to give him any ostentatious support, they can put me on the air and no one can make any objection. This is what we might call an indirect solution, heh?’ Government intervention in favour of any Presidential candidate is specifically forbidden by the new constitution, so this was a boast not just of deception but illegality. It is difficult to imagine a candidate in any developed democracy easily surviving such an indiscretion. Had Lula been associated with a scandal like this, he certainly would have paid for it. But with cloyingly benevolent media, and largely uneducated voters, it caused scarcely a ripple in Fernando Henrique’s progress towards victory. When asked by pollsters, half of the electorate didn’t know what the word ‘scruple’ meant.
Culturally, the gulf between the privileged and the povão – the broad mass of the population – might have been expected to favour Lula, as a son of the poor and unlettered. In fact, its effect was on balance the opposite. The stocky, bearded figure winding up audiences on the stump, hoarse with fatigue and emotion, won over fewer of the disadvantaged than the coolly elegant authority setting out priorities for the nation, in television spots as technically polished as any up north (professional advice from Clinton’s entourage had been engaged). The texture of Brazilian society, marked by centuries of domestic slavery, continues to be a curious mixture of the deeply hierarchical and remarkably informal, a distinctive combination that produces a singular kind of – almost playful – deference. Fernando Henrique’s intellectual qualifications signified for this popular sensibility an ability to rule that Lula – his smallest grammatical error picked up by reporters – visibly lacked.
The contrast was compounded by the message of each candidate. Lula centred his campaign on the social sores that make Brazil the most unequal industrial society in the world, trying to awaken voters to anger at the unbearable injustices around them. But often people don’t want to be reminded too much of their own misery. Victor Kiernan once wisely remarked that if class consciousness has historically always been weaker among the exploited than the exploiters, one reason is simply that it is too depressing to live with the constant thought of one’s own ill fortune – some kind of escapism is virtually an existential necessity. For many, Lula’s indictments – however truthful – were dispiriting. Fernando Henrique, on the other hand, while not denying inequality or suffering, focused his campaign on the vast potential of Brazil as a nation, and the bright future of its people, if the right kind of growth could be achieved again. Reforms were held out, too. But the key-note was hope, not indignation.
With more than twice as many votes as Lula, Fernando Henrique won the Presidency by a landslide on the first ballot. Few electoral victories have been so decisive. The triumph had, nevertheless, a shadow. The political front that rallied behind Cardoso included virtually every social force that had backed Color, plus all the centre-left opinion that had rejected him. Yet, although the size of the electorate had increased and voting is compulsory, Fernando Henrique polled a total vote – 34 million – slightly below Collor’s final score. Defying the law, 16 million abstained and another 14 million cast either blank or invalid votes – three times as many as in 1989. When counting was complete, it became clear that the electorate had divided into three constituencies: those who voted for Fernando Henrique (36 per cent), those with no clear preference (33 per cent), and those who voted for other candidates (31 per cent). Disillusion with a decade of aimless democracy, and apathy at a contest with a too predictable outcome, set limits to the base of the new Presidency.
Cardoso will be inaugurated in January. The immediate priority of the incoming regime will be to prevent the real going the way of its predecessors. Fernando Henrique cannot afford any re-run of the cycle of Sarney or Collor. Inflationary pressures were tactically contained by both Government and business to help his campaign – the head of the Employer’s Federation in São Paulo openly urging firms not to raise prices before polling-day. The exchange rate is overvalued, hitting exporters, and consumer credit has been tightened. To maintain stabilisation, further austerity will be needed. On the other hand, any sharply deflationary course would not only make confrontation with the trade unions inevitable, but the keeping of campaign promises impossible. The centrepiece of Cardoso’s programme was a pledge to invest $100 billion in infrastructural projects, to boost growth and generate employment, without raising taxes. A major inflow of foreign capital and sale of state enterprises are designed to cover the funding gap. Reforms of health, education, agriculture, housing and pensions are also promised – typically, however, without spending targets.
The constraints on these will be tight. Brazil is a federal union, in which the budget of the central state is currently so waterlogged by debt repayment and statutory obligation that only a quarter of total expenditure is discretionary. The fiscal system is notoriously chaotic and regressive – only seven million out of an economically active population of 50 million pay income tax. Fernando Henrique is committed to render it more equitable, without increasing total receipts (far below OECD levels, at about 25 per cent of GNP). But here he has remained studiously vague: tax reform is all too likely to split the coalition that elected him. His campaign literature says he will avoid ‘simplistic solutions’.
Squaring the different requirements of this prospectus is going to be a hard task. But the general direction of Cardoso’s strategy is clear enough. It corresponds fairly closely, in fact, to the recommendations of Latin America’s leading advocate of a post-socialist Left, Jorge Castañeda, in his recent major work Unarmed Utopia. The scenario runs roughly as follows. Sound money and moderate deregulation, restoring business confidence, will set the stage for stable growth and higher employment; while sale of state assets will create a compensation fund for social investment and reform. In practice, the scale of privatisation is likely to be greater than currently admitted – nearer $50 than $15 billion may be needed to cover revenue shortfalls. The employment effect of spending programmes, on the other hand, is likely to be less than envisaged. The phenomenon of jobless growth is not confined to the developed countries: it has been a marked feature of the Brazilian economy for some time. Unemployment, after steadily rising over the past decade, now stands at an official (i.e. understated) figure of 22 per cent. Cardoso, an admirer of Felipe González, has learnt the danger of too definite promises from the Spanish experience, and been careful to avoid any specific target of job creation. But the social side of his administration cannot be an optional extra: he will be vulnerable if there is no substantial improvement here. In the countryside, a modest goal of settling 100,000 landless families on uncultivated soil has been set. But given the nature of his agrarian allies, even this is not guaranteed. There is no magic way of reconciling the interests of capital and labour, landowners and peasants, middle and under-classes, in a society as staggeringly polarised as Brazil. Price stability, rapid growth, and income redistribution are a triad that has rarely been achieved by any government.
Still, the scale of the social problems facing the new administration must be set against its political assets. Since re-democratisation the Brazilian Presidency has looked a weak institution. The Constitution of 1988 gave greater powers to Congress, and reduced the Federal executive’s share of public revenues – changes that certainly restrict its reach. But the impression of feebleness owes much more to the incumbents than to the office. Sarney was not elected at the polls, Collor had no party behind him, and Itamar was a substitute. Their performances have obscured the reality that the Presidency is a far more powerful authority in Brazil – juridically and politically – than in the United States. For it both controls an extensive public sector – the six largest firms in the country are all state enterprises – that gives it a steering capacity over the economy unknown to the White House, and confronts no organised counterweight in Congress, where partisan discipline is minimal compared even to the very low standards in the US legislature.
Brazil has always had the least significant party system of any country in South America, and under the new Constitution it has disintegrated still further. The result is a fragmentation and confusion in Congress that can frustrate a weak President, but offers few barriers to a strong President – or even just a freshly-elected one. Fernando Henrique, an experienced navigator, knows the meanderings of the legislature from within. He now arrives to head the executive, armed with a landslide mandate, notable force of personality, and broad Congressional support. There will be few obstacles to his will in the first year.
There is an irony here. Historically, the Presidency in Latin America is an import from the United States, imitated from the Constitution of 1783. A case could be made that it has done more damage south of the Rio Grande than Coca-Cola or the Marines. In recent years, for the first time since the days of Batlle in Uruguay, there has been growing criticism of it by Latin Americans, who see it, rightly, as an invitation to autocracy and demagogy, and an impediment to any responsible political system of parties and principles. This feeling – we can expect it to develop in Russia too, where fixation with the US has produced an even worse copy – was strong enough in Brazil to put the question of the best form of government, after much public discussion, to a referendum in 1993. In that debate Fernando Henrique underlined the costs and dangers of Presidentialism, and urged the adoption of a parliamentary system along European lines, to strengthen democracy in Brazil. Convinced that it had a winner in Lula, the PT, by contrast, after earlier championing parliamentarism, jettisoned its commitment and backed the traditional system. It has now earned the reward for this opportunism. Fernando Henrique, on the other hand, after criticising an over-mighty institution, has entered into possession of it without qualms. It seems likely the result will not be to diminish its powers, but to expand them. There is already talk of revising the constitution to permit a second term, before the first has even started. Whatever else Cardoso might lack for a successful Presidency, it will not be executive influence.
If ‘political capacity’, in Gramsci’s phrase, marks the new ruler off from his predecessors, there is a further contrast that could be of even greater consequence. The platform on which Fernando Henrique has been elected is a moderate one. His campaign biography goes out of its way to declare: ‘Não é radical.’(‘He is no radical.’) It is possible – perhaps probable – that his practice will be yet more limited than his promises. Even in that event, however, he could still win the loyalty of the dispossessed. For Brazil has suffered from an unbroken series of brutal or footling rulers for three decades now, not one of them – save the final offbeat locum – possessed of the smallest sensibility for the poor or down-trodden. At its height, the military regime ruled firmly and skilfully. But it was never liked: its most prosperous years, under Medici, were the period of greatest fear. The civilians who succeeded the generals proved to be liars and crooks, without even claims to competence. Against this dismal background, any half-way decent democrat is bound to shine. It is a long time since the Brazilian people – a sentimental nation – felt any affection for a President. A few gestures of real concern might now go a long way. The condition of millions remains so desperate that even a modicum of popular measures could create lasting gratitude. Critics of Fernando Henrique on the Left delude themselves if they imagine he will neglect these. Compassion and calculation alike make it certain he will not.
At the same time, the reactionary allies who ensured his victory cannot be ignored. There is an illustrious precedent for the kind of balancing-act Fernando Henrique must now embark on. The long ascendancy of Getulio Vargas in Brazilian politics was based on a dual system of support: traditional coronelismo in the countryside and industrial populism in the cities, embodied in the two unequal parties he created after the war, the PSD of landowning élites and the PTB of paternalist unions. Today, the relative weight of rural and urban societies has altered completely; and the mechanisms of political control are no longer the same. Intimidation in the backlands has dwindled, and corruption of labour virtually disappeared. Face-to-face networks of patronage and dependency have lost ground to the powers of advertising and television. But a double schema of hegemony continues to be possible. Fernando Henrique’s coalition of the PFL and PSDB – one party dominant in the North-East, the other emergent in the Centre-South – bears an evident resemblance to Getulio’s formula. His electoral front even included, on a nice antiquarian note, the rump of the PTB.
This is an analogy that will only go so far. The paternalism of the Vargas era, and its epilogue under Kubitschek, the founder of Brasilia, has passed. So, too, has their kind of nationalism: Cardoso will dismantle many of the state enterprises they built. ‘Brazil is no longer an underdeveloped country,’ reads the first sentence of his manifesto. The claim is too simplified, but it is certainly true that Brazil now contains a modern society whose dynamics are structurally dominant in the country as a whole. In this sense, a more appropriate parallel for Fernando Henrique’s administration might be Roosevelt’s regime in the Thirties. FDR, too, enjoyed the support of the most regressive oligarchy in the country, the Bourbon Democrats of the South – critical for his overall system of rule, but contained as a regional enclave within a political order otherwise resting on the loyalty of the urban masses. Cardoso has often expressed his admiration for the New Deal, and the atmosphere of his Presidency – surrounded with reforming advisers of every kind – might come to recall it. The model of Roosevelt, of course, delineates a maximum of historical success and power.
There is one principal obstacle to such a prospect. Roosevelt didn’t have to face any significant force to his left. In American politics, a respectful Communist Party or an awkward John L. Lewis were marginalia. In Brazil, on the other hand, the PT is a central presence on the national stage. It is often described – even by its enemies – as the only real political party, with a genuine mass membership in the country. There is an element of myth in this. The PT claims over half a million ‘affiliates’, but its active members number only about seventy thousand. Unquestionably, however, their commitment and discipline are superior to those of any other party, many of which are mere labels for hire. Behind these militants stand a multitude of voters – last month some 17 million people preferred Lula to Cardoso. The Party is less popular than this, with about 12 per cent of vote for Congress. But the PT’s ultimate strength lies in its roots in the unions. The Party was born as a vehicle of organised labour, at a time when independent trade unions were still few and weak. Today, CUT – the confederation close to it – claims two thousand unions with 16 million members. Recent growth has been concentrated in the countryside, where rural unions are often important symbols, but lack striking power. In the towns, however, CUT unions are a formidable force – organising everything from the Federal police to banking, oil wells to auto plants, docks to hospitals – across public and private sectors, industry and services.
What kind of role is this labour movement likely to play under the new government? In Argentina, Peronist trade-union federations that were in the past much more powerful than anything in Brazil have been crushed with ease by Menem – who also has had no difficulty in co-opting the main opposition party, the Radicals, into a reform of the constitution to permit his own re-election. The comprehensive triumph of Argentine neo-liberalism, under a ruler of Peronist credentials, raises the question: could the same evolution occur, mutatis mutandis, in Brazil – where the stabilisation programme already owes much to its example? There is a moral chasm between Cardoso and Menem as personalities. But the logic of their politics might still converge, when Fernando Henrique confronts – as he is bound to do – resistance from the trade unions. The outcome is unlikely to be the same, however. Brazilian labour may have less experience and tradition than Argentinian, but it has not been demoralised by thirty-five years of economic stagnation and regression, and it is independent of the President. A clean sweep is improbable. But division and confusion are quite possible. In Congress, Fernando Henrique will have many opportunities to play off Right against Left – relying on the support of the PFL for neo-liberal measures, and appealing to the good will of the PT for social reforms. ‘Moderates’ in the PT – including many of its best talents – have always been close to ‘progressives’ in the PSDB. In due course Cardoso, lacking any base of his own in organised labour, will probably try to split the Party and integrate this wing into his coalition. If he were to pull this off, he would really have updated the Getulist formula.
It is to soon to say what the chances of such a destructive operation are. Ideologically, the PT is not a particularly united or coherent formation. It contains various potential lines of fissure. But it is a democratic party, with a hard-won sense of the value of grass-roots organisation and genuine debate, and a collective pride in its autonomy. The next years will be the real test of it. Brazil is the only country in the world to have produced a new working-class party of classical dimensions since the war. The emergence of the PT not only defined a global trend, the decline of labour politics throughout the capitalist world in the Eighties, but also a national pattern, the long-standing absence of serious parties of any sort in the largest Latin country.
Today it is widely believed that the epoch of mass party systems as such is coming to an end. If this were so, Brazil – having missed their moment – would now never know it, but rather already anticipate the electronic politics of the future. The PT would then be a quirk out of time, soon to pass. This is not an idle fear. The fate of Solidarity, with which it was so often twinned, is a warning of what might occur. But everything is still in play. The most interesting ruler and most challenging opposition of the Nineties have yet to do battle. It is a reasonable assumption that Fernando Henrique will be the best President Brazil has ever had. But, bearing his various predecessors in mind, we shall have to wait and see what kind of compliment that turns out to be.
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